Brown raises tax cut speculation

Gordon Brown has increased speculation he may cut taxes, saying he was looking "at everything" that could be done to help people through the downturn.

He told GMTV tax changes were a matter for the pre-Budget report - expected next week although he said that it would be "in the next few days".

Meanwhile David Cameron says the Tories will announce "tax changes to encourage businesses to take on workers".

The Lib Dems have already said they would cut taxes for lower paid people.

Food prices

Asked about possible tax cuts by a "hard-pressed" family taken into No 10 by the breakfast programme, Mr Brown said petrol duty had been frozen and people were already getting £120 back in their income tax following the 10p tax row.

He added: "Of course we are going to look at everything but that's a matter for the Budget and the pre-Budget report.

Conservatives: Abolish stamp duty for first time buyers on homes up to £250,000, raise inheritance tax threshold to £1m, cut corporation tax from 28p to 25p, encourage council tax freeze. Expected to unveil more tax cuts on Tuesday

Lib Dems: Have already pledged tax cuts for low and middle-income families by cutting basic rate from 20p to 16p. Would remove tax loopholes for the rich.

"What I'm determined to do is get all countries around the world trying to get their economies moving again.

"And one way you can do that is by putting more money into the economy by tax cuts or public spending rises but that's something we have got to look at in the next few weeks."

When it was put to him that help was needed now, rather than having to wait for weeks, he said: "We've got a pre-Budget report in the next few days."

Asked again about rumours that VAT may be cut he said: "We're looking at everything we can to see how we can help people and we will make announcements very soon about what we are going to do."

David Cameron said in a speech later that the Conservatives would not allow unemployment to ruin people's lives.

There have been reports the party may propose a National Insurance payments holiday for new workers, to encourage employers to take on staff.

'Enormous deficit'

Mr Cameron told journalists after the speech they would have to "wait and see" what the proposals were, but said there were some clear principles: "We want to help and we will help and we will put money back in people's pockets."

He also warned against permanently damaging the public finances and criticised the government for having an "enormous budget deficit even before the recession began".

"This government is talking and behaving as if there's no limit to what you can borrow," he said - adding any new proposals had to make clear where the money was coming from.

The prime minister's spokesman said that increasing borrowing was now the accepted view across the world and the government would have to look at all the issues relating to tax and spending.

Lib Dem leader Nick Clegg told the BBC other parties were "clambering on the bandwagon" as the Liberal Democrats had been advocating tax cuts for low and middle income earners for months.

'Rebalance' taxes

But he dismissed Conservative proposals to cut inheritance tax and freeze council tax as "smoke and mirrors" adding: "We are the only party saying that tax cuts have got to be big, they have got to be permanent and they have got to be fair."

He said there was no point borrowing more to fund tax cuts, as it would eventually have to be paid back.

Instead it was time to "rebalance the tax system to make it fairer" by removing "loopholes" that benefit only the rich on capital gains and tax relief on pension contributions, as well as clamping down on tax avoidance and introducing more green taxes.

Mr Brown's comments came ahead of a keynote foreign policy speech in which he will argue the global financial crisis has given world leaders a major opportunity for change.

The PM, in his annual speech at the Lord Mayor's Banquet in London, is expected to call for the rebuilding of the international financial system.

Ahead of a meeting of leaders of the world's 20 major economies in the US at the weekend, Mr Brown is expected to say that recent co-ordinated global action during the credit crisis showed the potential of a stronger multilateralism.

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